1 doi: /j X x BJPIR: 2010 VOL 12, Think Tanks in the United Kingdom and Germany: Actors in the Modernisation of Social Democracybjpi_ Hartwig Pautz This article describes and analyses the role that think tanks in the United Kingdom and Germany played in the modernisation of the British Labour party and the Social Democratic party of Germany between 1992 and In these years, both parties were de-traditionalised. Especially, their central objective, that of achieving a socially just society, was redefined under the banner of the Third Way. Policy experts from outside the political parties played an important role in this process. The article discusses what a think tank is and whether in times of paradigmatic crisis actors external to a political party can exert influence on the parties policy objectives and thus supersede internal policy-making institutions. It also analyses, in comparative perspective, the conditions in which think tanks in both countries can be most effective. Keywords: think tanks; Labour party; SPD; policy advice Introduction This article looks at the role of think tanks in the modernisation debates of the British Labour party and the Social Democratic party of Germany (SPD) between 1992 and During this period, after many years in the electoral wilderness and in programmatic disarray, both parties underwent a modernisation process understood as the reprogramming of organisational goals with the aim of adapting to the political environment (Weßels 2001, 43). This modernisation was shaped both by party-internal procedures committees, policy fora and programme commissions and by experts from outside the parties whose expertise, at times, circumvented and overrode the official internal policy and programme-making institutions. The modernisation process was aided by the strengthening of party elites in both parties through various organisational changes (Jun 1996). This article highlights, in particular, if and how external expertise from think tanks was relevant in this modernisation process. By doing so it addresses a gap in the literature in a variety of ways: firstly, it describes in detail how think tanks were active agents of change within specific larger socioeconomic conditions of action (Mahoney and Snyder 1999). Most academic research pays only scant attention to what it was that think tanks actually contributed to a particular discourse and how they did it. Secondly, the study is based on a new, broader definition of what constitutes a think tank, thus reflecting the changing nature of think tanks. Thirdly, the study is underpinned by a number of theoretical concepts which help us to understand how think tanks do what they do. It is guided by Peter Hall s notion that
2 THINK TANKS IN THE UNITED KINGDOM AND GERMANY 275 experts external to organisations can produce momentum for what he calls third order change of policy objectives (Hall 1993). While Hall discussed the power of external expertise and paradigmatic change in relation to government and civil service, this study looks at political parties and investigates Winand Gellner s claim that in crisis situations such as repeated electoral defeat political party elites use external expertise to control policy and programme modernisation (Gellner 1995). Marten Hajer s concept of the discourse coalition is used to explain how think tanks as physical locations in a network of a variety of actors can become effective (Hajer 1993). Lastly, the study is novel because it compares think tanks in two different European polities which were chosen according to a number of interlinked criteria. The conditions in which think tanks were active were similar in the UK and Germany: two centre-left political parties were searching for a path towards modernisation in comparable circumstances after the breakdown of Keynesian liberal corporatism (Van der Pijl 1998) and under the conditions of permanent austerity of the welfare state (Pierson 2001). These conditions contributed to a redefinition of the centre-left s central policy objective of social justice under the banner of the Third Way in the 1990s and 2000s. The UK and Germany were at the forefront of this revisionist debate in Europe s centre-left (Cuperus and Kandel 1998; Barrientos and Powell 2004). To different degrees and with varying success, Tony Blair and Gerhard Schröder as party leaders modernised Labour and the SPD, respectively, before coming to governmental power and/or during holding office. Under their governments, both countries witnessed a merger of labour market and welfare policy into what Bob Jessop calls productivistic social policy (Jessop 1994) which oscillates around welfare-to-work, make-work-pay and human capital investment discourses. The modernisers adopted a new concept of the welfare state which has been variously termed the activating, enabling or social investment state. While the traditional social democratic Keynesian welfare state focused on the redistribution of income, wealth and power with the aim of greater equality of outcome and de-commodification, the modernisers defined social justice no longer as the multidimensional equity of resources but as the continuous redistribution of opportunities to (re)integrate the economically inactive into the labour market and thus, by implication, into society. Ruth Levitas identified this discourse as the social integrationist as opposed to the traditional redistributive social policy discourse (Levitas 1998). It deviates substantially from traditional social democratic principles so that it is justifiable to speak of a third order change with regards to Social Democrats central policy objective (Pautz 2009). Additionally, the UK and Germany were chosen because, unlike for example in France and most other European countries (e.g. Stone and Denham 2004; McGann and Johnson 2005; Williams 2008), party modernisers actually had the opportunity to involve think tanks in the modernisation process as they could resort to an extensive and active think tank landscape. Methodologically, the study is approached through 35 semi-structured interviews with (former) analysts from think tanks, former members (often senior academics) of commissions or working groups set up by think tanks, and politicians from both parties carried out between 2004 and Furthermore, political party publications such as policy review documents, party programmes and election manifestos were analysed.
3 276 HARTWIG PAUTZ Defining Think Tank Given the variety of organisations that give policy advice it is important to define what is meant by think tank. While in the English-speaking world the term used to evoke images of scientific detachment and objectivity, in Germany the term is popular with more recent advocacy-oriented policy research institutes but sometimes still frowned upon by organisations thriving on their ostensibly scholarly disposition. Thus, the understanding of what constitutes a think tank is highly reflective of the socio-political context in which think-tanks were first constituted (Stone 2007, 260). For this study think tanks were defined as non-governmental institutions, independent from government, political parties or organised interests. They want to influence policy, but have no formal decision-making power; they lay claim to political neutrality while often not making a secret of their ideological standpoints. Some carry out little research themselves and commission external experts or recycle existing research while others have considerable internal research capacities. Furthermore, think tanks want to change policy through intellectual argument rather than through behind-the-scenes lobbying. They advocate ideas, maintain and develop policy networks and provide expertise to policymakers (Stone 2000). They inform decision-makers about policy developments in other countries and can play a role in transnational policy transfer networks (Evans and Davies 1999). Most research defines think tanks as not-for-profit organisations. However, this criterion implies that only financial profit motives may compromise the independence of a think tank. Other motives to engage with decision-makers and other power-holders like wanting to gain access to valuable government data, seeking (in)formal positions within the client organisation or stimulating government s interest in commissioning policy evaluation also have a potential impact on the intellectual independence of a think tank and on the relationship between think tank analyst and those advised (Pautz 2008a). The not-for-profit criterion constructs a false dichotomy between think tanks with charitable status and organisations like management consultancies or university-affiliated institutes when all three types of organisation may fulfil the same tasks. Instead of the not-for-profit criterion the term financial autonomy is preferable if defined as being not dependent on one single benefactor. Arguing with Hall, think tanks can become significant agents of change when a policy paradigm is seen as failing and the usual agents of change in Hall s study on welfare policy change this is the civil service are seen as incapable of dealing with the situation. Third order change Hall uses this term to describe changing policy objectives as opposed to merely changing policy instruments to reach the same goals can be the consequence when external actors are given the opportunity to contribute their expertise. As Hall says, a new policy network can spring up and, with new actors, may give the policy process a different direction (Hall 1993). Since studying think tanks means studying ideas, structures and agency, it is important to have a model of the policy process. This article understands think tanks as one agent among many in a particular discourse coalition a variant of the policy network concept (e.g. Marsh and Rhodes 1990). A discourse coalition, according to Hajer, is the ensemble of a set of storylines, the actors that utter these storylines, and the practices that conform to these storylines, all organized around
4 THINK TANKS IN THE UNITED KINGDOM AND GERMANY 277 a discourse (Hajer 1993, 47). The discourse coalition concept focuses on the nexus of power and knowledge and its relevance for policy change and continuity. A wide range of actors, not necessarily known to each other, are responsible for the (re)production of policy discourses. Central to Hajer s concept is the notion of the storyline: a linguistic mechanism around which discourse coalitions assemble, a generative sort of narrative that allows actors to draw upon various discursive categories to give meaning to specific or social phenomena (Hajer 1995, 56). For this study, the concept of the activating or social investment state was identified as such a storyline. A discourse coalition is held together by its members shared belief in an interpretation encapsulated in the Third Way of a threat, crisis or event that constructs the nature of the policy problem under consideration (Hajer 1995, 247). A think tank can contribute with its expertise to the construction of such an interpretation and thereby to the (re)production of the hegemony of one discourse coalition over another. Whether or not a think tank is successful in its task of producing a hegemonic discourse can be assessed through the concordance method (Yee 1996). This method does not establish causal relationships between, for example, policy advice and policy outcomes but looks at the congruence of think tank output and policy outcomes to make cautious statements about the relevance of a think tank s activity. The Literature The literature on think tanks in the UK is, in general, more developed than that on German think tanks although there is a notable lack of published research on more recent developments. Academic interest was at its peak during the 1980s and 1990s when think tanks were analysed as significant agents of change in the development of the neo-liberal socioeconomic paradigm associated with the New Right (Desai 1994; Cockett 1995; Denham and Garnett 1998). Scholars took an interest in how the Keynesian paradigm had been intellectually disgraced, and identified intellectuals and think tanks as second-hand dealers in ideas (Hall 1988). This debate was not continued with regards to the modernisation of the Labour party. Exceptions here are an analysis by Andrew Denham and Mark Garnett of centre-left think tanks in which they speak of a fourth wave of think tank development which was ideologically less clear-cut than the think tanks of the New Right or the third wave of the 1970s (Denham and Garnett 1996). Justin Bentham (2006) and Robert Blank (2003) came to the conclusion that think tanks served as important locations for Labour modernisers and that they, first, contributed to the construction of a new social democratic narrative and thus supported the party leadership in their efforts to convince the public of Labour s modernity and, second, attracted new policy field stakeholders to the New Labour coalition from, for example, the business community. Besides the Institute for Public Policy (IPPR), Demos and the Centre for Economic Performance (CEP) these organisations are at the centre of this study because of their strong relevance to the processes under scrutiny there are further think tanks that can be considered as politically on the centre-left but which were not found as having been of similar relevance in the
5 278 HARTWIG PAUTZ process as the three think tanks named above. The Social Market Foundation, founded in 1989 by members of the disbanded Social Democratic party, has over time, been described variously as John Major s favourite think tank, a free market think tank and as a supporter of New Labour s policy agenda (Castle 1995) without ever having been part of the inner New Labour think tank circle. The New Policy Institute, founded in 1996, was close to Tony Blair (Stone 2001) but became critical of New Labour s social policy approaches relatively soon after the 1997 elections. The labour movement oriented campaigning think tank Catalyst (1998) is committed to a redistributionist agenda, is dominated by Labour party members and left-leaning academics and can be considered a reaction to the centrist shift of Labour. The last in the list of more recent think tanks associated with the Labour party is the John Smith Institute (1997), named in memory of the late Labour leader. Because of its close links to Gordon Brown s Treasury in 2008 the Charity Commission ruled that the think tank had strayed too far from its educational remit by hosting events at 11 Downing Street. The Commission did not support the claim that Brown used the institute to further his political aspirations (Charity Commission 2008). As this article will show with respect to Labour and the SPD, a political party s electoral defeat and programme and policy uncertainty can lead to an upsurge in think tank activity and can spur a growth in think tank numbers. A number of think tanks close to the Conservative party have emerged in the wake of the party s electoral decline and programmatic difficulties since the mid-1990s. For example Civitas (2000) is an explicitly anti-étatiste advocacy offspring from the neo-liberal Institute for Economic Affairs, and Politeia (1995) follows a political and economic philosophy supported by the Conservative frontbenchers on its advisory board. Thus, arguably the political topology of left and right continues to shape the think tank landscape in the UK to some extent. The proliferation of think tank numbers in the 1990s and 2000s and the slow but visible decentralisation of the British think tank landscape in the aftermath of devolution have not stimulated much academic debate. One of the few exceptions is Denham and Garnett s article which revisits think tanks and looks at them in the light of the end of ideology (Denham and Garnett 2006). This author s study of Scottish think tanks paints a bleak picture regarding the relevance of think tanks in Scotland s politics (Pautz 2007). Germany is not the best-researched country when it comes to think tanks. A good overview of the German think tank landscape was given by Martin Thunert (2008). There is barely any current research on the role of think tanks in the SPD s modernisation process with the exception of this author s study (Pautz 2008a). Scholars have paid more attention to other institutions that give policy advice, such as the information service for Members of Parliament (Backhaus-Maul 1990; Brown et al. 2006), governmental permanent commissions (Wiegard 2005) and parliamentary commissions (Altenhof 2002). Among the first to mention think tanks was Claus Leggewie, who depicted them as actors responsible for the neoliberal turn of federal government in the 1980s (Leggewie 1987). Just as in the British case, there are a number of think tanks identifiable as centre-left that are not discussed in this study because they were not found to be of significant relevance. For example, the Trade Union Congress Hans-Böckler Foundation has two research institutes under its roof that have contributed very little to the debate
6 THINK TANKS IN THE UNITED KINGDOM AND GERMANY 279 about the SPD s modernisation. This is not so surprising given the far weaker links between the German Social Democrats and unions compared to the UK. The political foundations that were found to vitalise and stabilise Germany s party system (von Vieregge 1980) are interesting phenomena in the German think tank landscape. Of these, the SPD-affiliated Friedrich-Ebert Foundation is discussed as an important participant in the SPD s modernisation debate. There have been a number of interesting developments in Germany s think tank landscape over the past decade. When the new centre-left federal government of Social Democrats and Greens took office in 1998, a new breed of political actors emerged in the form of public relation campaign organisations which advocated a return to the ordo-liberal market economy of the 1950s. Some of these campaigns were launched or supported by think tanks and deployed campaigning techniques usually associated with, for example, Greenpeace or Amnesty International. Examples are organisations with telling names such as the Foundation for the Rights of Future Generations and Deutschland Denken! this translates as Imagine Germany!. An example for the link between a think tank and such a campaign group is the Initiative New Social Market Economy. It was founded and sponsored by the metal industry employers association and was intellectually supported by the employers think tank Institute for the Economy (Leif and Speth 2006; Biermann and Klönne 2008). Over the past few years, think tanks have attracted attention from journalists in the context of recent labour market reforms (Klöpfer 2002; Grunenberg 2004) and some critical academic research (Plehwe and Walpen 1999; Schöller 2003; Wernicke and Bultmann 2007). More recently, governmental ad hoc commissions have been analysed as institutions, deployed by government, to facilitate policy change. Think tanks developed influence through these commissions (Färber 2005; Pautz 2008b). Management consultancies have increasingly acted like think tanks. While their role in public sector modernisation has come under journalistic scrutiny, there still exist only a few academic studies (Brosziewski 2003; Raffel 2006). How do the British and German think tank landscapes compare internationally? The US remains the global exemplar (McGann and Johnson 2005) for a think tank landscape in terms of numbers and funding. The UK and Germany have the most populous think tank landscapes and probably the most active think tank culture in Europe (Braml 2004). Thunert, for example, counted up to 130 think tanks in Germany (Thunert 2004), while a count in the UK reveals about 100 organisations. The British think tank landscape is more similar to that of the US than is the German think tank landscape: think tanks in the UK are more openly oriented towards advocacy and are more partisan, and German think tanks are more likely to receive money from government or government-affiliated organisations. Think Tanks and New Labour: Modernisation from Outside In the 1980s, the Labour party started a long and difficult modernisation process (Shaw 1994a) which culminated in the birth of New Labour in 1995 and in the adoption of the Third Way agenda beyond neo-liberalism and old social
7 280 HARTWIG PAUTZ democracy (Giddens 1998) as Labour s policy and programme guideline after When Neil Kinnock took over the party leadership in 1983 he started making a sustained effort... to relocate Labour within the mainstream of European Social Democracy (Wickham-Jones 2000, 12). Besides important organisational reforms designed to deprive delegates, unions and activists of power in favour of giving more power to the leadership (Jun 1996), one major plank of this effort was the policy review Meet the Challenge, Make the Change (Labour Party 1989). The review process demonstrated that thinking was changing: the recommendations significantly weakened the party s commitment to Keynesianism, nationalisation, redistribution and trade union rights. A strong emphasis was put on the need for improving the skills base in the UK to raise employability. Kinnock s successors, John Smith and Tony Blair, continued this supply-side modernisation course so that Labour largely finalised its modernisation before it won the 1997 election as New Labour. Thus, the party entered office with a policy agenda largely in tune with the party s wider political programme. In 1998, the party leadership made a further step towards the finalisation of modernisation by declaring that its policies were neither left nor right but, instead, followed a Third Way. The Third Way, later adopted by many European parties of the centre-left in content if not as a slogan, is a neo-revisionist (Merkel 2000) attempt to rethink policy objectives and instruments of social democracy. Advocates of the Third Way rejected the left s core objective of equality of outcome because they saw it not only as impossible to achieve but even as undesirable. Instead, equality of opportunity and social inclusion became the centre-left s main policy objectives. Therefore, welfare transfers would no longer be used to achieve de-commodification but money would be spent on welfare-to-work measures to get people into paid employment. The understanding of the role of the state changed significantly: it should restrict itself to activating and enabling its citizens to compete successfully in the labour market rather than providing an unconditional social security net. While the term Third Way itself was not granted a long lifespan, its core ideas remained the foundation of Labour policy under Blair (e.g. Blair 2006). This is, in a brief outline, how Labour became New Labour. How did think tanks play a part in this process? In the mid-1980s, senior Labour politicians felt that they needed additional intellectual support for their modernisation course as inner-party resistance to their centrist course was putting brakes on their efforts. Hence, financed by Labour-affiliated businesspeople and some trade unions, the Institute for Public Policy Research (IPPR) became operational in It was meant to act as an external stimulus for a revisionist discourse that would allow the modernising coalition to impose ideas top-down on to the party by establishing a new set of storylines striving for hegemony within Labour and by attracting new supporters from outside the party s traditional constituency. The IPPR was an institutionalised expression of Kinnock s frustration at the resistance of Old Labour proponents in the party s official policy-making institutions to further modernisation. While being de jure independent of Labour, the IPPR had very close connections to the party leadership: one example was the appointment of senior Labour figure Patricia Hewitt as think tank deputy director. Until 1989, she even kept working for the party from the outside, cutting and shearing the Policy Review, as Labour insider Phillip Gould reports (1998, 99). The think tank s work shows that it was strongly
8 THINK TANKS IN THE UNITED KINGDOM AND GERMANY 281 lobbying the party to abandon its long-held assumptions about state, market and ownership of the means of production (e.g. Blackstone et al. 1992). A crucial moment for the IPPR and its influence on Labour came with the Commission on Social Justice (CSJ) which Labour leader John Smith instigated in While the idea for this venture was thought up by IPPR and senior Labour figures, Smith officially asked the IPPR to facilitate a commission to rethink what social justice should mean and what policies should be put in place to rebuild British society. While Smith was taking personal ownership of the commission, de facto its remit gave it a flavour distinctly similar to the Policy Review (Taylor 1997, 140), whose failure to exorcise the party of its old habits had contributed to the 1992 election defeat at least that was the view of many in the Labour leadership. In reality, the commission was thus set up to speed up the modernisation process from outside and top-down. The CSJ was the most resource-intensive and high-profile project that the IPPR had had to manage to that date. The IPPR set up a secretariat for the commission, it contributed evidence like other organisations in the process of consultation and engaged in informal discussions with commissioners so that the think tank provided a kind of expert in-house resource (interview 1, IPPR 2007). While commissioners did not feel they were being leaned on by Smith or by the IPPR they were aware that Smith used the commission as a vehicle for his political strategy therefore the commission shied away from making proposals that could be a threat to making Labour electable again. If proposals were considered too Old Labour by the secretariat headed by David Miliband it quickly stifled them while also acting as a gatekeeper to ward off unwelcome influence from trade unions or Labour s left. It also informed Labour s leaders about the debates in the commission: things were being checked out with the party and when concrete policy proposals emerged in the final phase of the commission, the secretariat was perceived to be clearly articulating the views of the party leadership (interview 2, IPPR 2007). The commission s report speaks an early Third Way language. It tells the tale of three futures : that of the levellers, of the deregulators and that of the investors (CSJ 1994, 94). These metaphors for the old left, neo-liberalism and a new approach transcending the two were developed and pushed by the secretariat under David Miliband. He had been working closely with Anthony Giddens who was later to become the most vocal proponent of the Third Way and a confidante of Tony Blair s. The secretariat was particularly keen on associating the objective of equality of outcome with high taxation and thus as something that Labour should distance itself from if it wanted to convince the middle classes of its electability. In particular the simplistic juxtaposition of the three futures and its rhetoric broadside against Labour s egalitarian heritage an idea on which the secretariat insisted was something that some commissioners felt uneasy about but did not, ultimately, manage to omit from the report. The CSJ also proposed a number of more concrete policies: most importantly, it embraced a welfare-to-work agenda based on Australian examples as the best way towards creating a socially inclusive society. Both concepts welfare-to-work and social inclusion marked a further departure from earlier Labour policy and principles. The overarching storyline, that of the social
9 282 HARTWIG PAUTZ investment state, provided the framework to gather a new coalition of supporters around the Labour party that went beyond its traditional constituency. However, with John Smith s unexpected death in 1994 the commission s chances of influencing the party s political course grew slimmer as the new leadership tandem, Tony Blair and Gordon Brown, had not been involved in the commission and had never shown much interest in the IPPR either. Despite Blair s obsession with winning the battle of ideas (Gould 1998, 231), the commission was too much associated with Smith and thus almost Old Labour. Nonetheless, the report garnered significant media attention and Blair s rather lukewarm public endorsement. While commissioners at the time were convinced that their work was meaningless for the new party leadership, David Miliband s career move into Blair s circle of advisers gives substance to the analysis of the CSJ as a detailed blueprint for a renewed Social Democracy (Denham and Garnett 2004, 238) with an immediate influence on New Labour s vision of a modernised welfare-state (Fielding 2003, 184) which came to its conclusion with the Third Way. For the IPPR, the years after the CSJ were disappointing with regards to influencing the emerging New Labour party. Under a new director after 1994 Gerry Holtham, an occasional adviser to John Smith and therefore almost a relic of old times and with Miliband and Hewitt leaving the think tank, the IPPR neither had much influence on the piazza nor on the palazzo, as a senior IPPR analyst referred to the public and the party (interview 2, IPPR 2007). The distance between the Labour party and the IPPR grew especially after the think tank had managed to convince leading businesspeople to accept the necessity of a national minimum wage through its Commission for British Business and Public Policy (IPPR 1997). Some in New Labour s leadership had hoped that the minimum wage would disappear from their party s agenda and found the IPPR s commitment to it irritating. In the IPPR s place, a new think tank emerged to be publicly associated with the genesis of New Labour: Demos, founded in Its predecessor organisation was the journal Marxism Today in which Tony Blair had occasionally published in the late 1980s (Blank 2003). Openly disaffected by Labourism, Demos rejected the validity of left right thinking, advocated thinking for what it called New Times and thus was an ideal partner for those who wanted to place Labour firmly in the political centre. Demos style was different to the IPPR in that it did not have as much interest in proposing concrete policies. In a sense, Demos was therefore more useful to Labour modernisers because the ideas it provided were generic enough to make it difficult for Conservative politicians or hostile journalists to attack them and thus to attack them as Labour policy in the making and were eye-catching enough to present those associated with Demos as modernisers. The close relationship between Blair and Demos first chairman Geoff Mulgan this relationship dated back to Mulgan s prolific writing for Marxism Today and led to Mulgan becoming Policy Director at 10 Downing Street in 1997 demonstrated Labour s determination not to risk public controversy about its policy agenda: it ensured that Demos, as an organisation associated with Labour, would not publish policy ideas out of line with official party policy. During these years, it became clear that unless a think tank was willing to relinquish its intellectual independence and work closely with party leaders it could not become an intellectual companion (Denham and Garnett 1998).